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Texas School Districts May Owe Oil Companies Millions

October 26, 2011

AUSTIN, Texas - Already hard-hit by more than $4 billion of state cuts, Texas school districts may have to pony up millions more to some of the nation's largest oil refineries.

So far, 16 companies, including Valero Energy, have requested $135 million in property-tax rebates they say are owed to them for installing pollution-control devices covered by a state incentive program.

Tom "Smitty" Smith, spokesman for Public Citizen of Texas, says the controversy comes at a pivotal time for Gov. Rick Perry, who announced Tuesday he would slash both the federal Department of Education and the Environmental Protection Agency if elected president.

"At a time when the refining industry is making near-record profits, this is a real critical question for Gov. Perry. Are you going to stand up for the school kids, or are you going to stand up for corporate welfare for the biggest polluters in the state?"

Perry has said he trusts the Texas Commission on Environmental Quality to evaluate the refund requests, but Smith says TCEQ's members - all appointed by the governor - have a pro-corporate history. Unless there's a public outcry, Smith fears, they will side with an industry which has donated heavily to past Perry campaigns.

"The tendency of the TCEQ is to bend over backwards and give these large corporate polluters everything they want at the expense, in this case, of the schoolchildren of Texas and the taxpayers of the state."

Disagreement remains about whether the equipment Valero installed in 2007 meets eligibility requirements for tax incentives. Environmentalists contend it makes no sense to give state tax incentives for technology that already is required by the feds.

Some of the counties that might have to pay for the rebates include Harris, Howard, El Paso, Jefferson and Nueces. Many of the school districts which depend on refinery property taxes already have been struggling because of multiple corporate tax breaks.

"These aren't like rich suburban school districts that have lots of wealthy homeowners to tax. These are amongst the poorest in the country."

Linda Bridges, president of Texas' American Federation of Teachers, says some schools would find it impossible to take additional revenue losses after staff layoffs, larger class sizes and program cuts.

"There's a tremendous amount of money that has been cut that directly impacts kids. And then you add in rebates to Valero and other oil companies. It certainly makes a bad situation worse."

It's not clear when the TCEQ will decide the matter, but school advocates are expected to voice concern at the commission's next meeting Nov. 2. Meanwhile, community-based opposition to the tax refund has been growing, with some parents planning bake sales to demonstrate their need for more - not less - state aid.

Peter Malof, Public News Service - TX